Whether it’s because of inflation or higher interest rates, retail sales in many areas of the country are taking a hit, reports Placer.ai. Perhaps not surprisingly, retail foot traffic is also posting declines.
The company’s analysis of U.S. Department of Commerce data shows that not only did month over month adjusted retail sales fall in March 2023, but also monthly retail visits in Q1 2023 were consistently below January 2022 baseline levels, based on foot traffic data. Average daily retail foot traffic per month rose 28.2% above baseline in December 2022, then plunged to 3.7% below baseline in January 2023, landing at 1.1% below baseline in March.
Nationally, March retail traffic fell 5% year over year. But in some states, the retail visit gap was less than 2.2%, while in the five worst affected states the gap was more than 7.4%. The Northeast accounted for seven of the 10 best performing states: Massachusetts, Rhode Island, Pennsylvania, New Jersey, Connecticut, New York, and Vermont.
“Retail foot traffic was down 8.1% in March 2023 relative to March 2019, but the top five performing states all had Yo4Y visit gaps smaller than 2.1%, while the five worst performing states had visit gaps larger than 10.3%,” Placer.ai stated.
Foot traffic to fitness, beauty and spa, and theaters and music venues showed the highest monthly percentage rises in the first three months of 2023 compared to 2022, though significantly lower in March than in January or February. Fast food and discount and dollar stores also performed better than in 2022, though with smaller percentage increases.
Placer.ai cautioned that coming months may continue to challenge the offline retail sector. However, there is reason for retailers to hope, it said. “The many consumers (43% according to some estimates) still delaying making larger purchases may lead to a particularly strong Memorial Day, as pent-up demand drives shoppers back to stores,” it noted.